The trigger for Section 201 tariffs is unusual among trade remedies. Tariffs typically target specific countries accused of exporting products at artificially low prices. In contrast, a Section 201 tariff requires no demonstration of unfair trade practices. Instead the tariff provides an industry with relief, lasting up to four years, from international competition when a glut of imports suppresses domestic prices.[1]

Imposing a Section 201 tariff is a lengthy process starting at the U.S. International Trade Commission (ITC) and concluding with a presidential decision. After receiving a petition, the ITC determines if the petitioners represent the entire industry’s interests. On May 23, 2017, the ITC concluded Suniva satisfied this burden. The next step is to determine whether the imports cause or threaten “serious injury” to the industry. At this stage, Suniva and SolarWorld had to establish that increases in imports were the sole cause for injury; however, tariff opponents argued that Suniva and SolarWorld’s financial mismanagement was the real cause of injury. On Sept. 22, 2017, the ITC sided with SolarWorld and Suniva, finding that U.S. solar panel manufacturers had suffered injury.

After finding injury, the ITC moves to determining the appropriate remedy. On Oct. 31, 2017, ITC commissioners published their recommendations. The recommendations favored imposing a tariff but varied in their proposed rate and whether to impose an import quota. Three commissioners recommended four-year tariffs for photovoltaic cells and assembled solar panels. For photovoltaic cells, a 30 percent tariff would be imposed after reaching annual import quotas. For assembled solar panels, a 35 percent tariff would be imposed on all imports. Over four years, annual tariff rates would gradually decrease while in-quota levels for photovoltaic cells would rise. Another commissioner proposed setting an 8.9 gigawatt cap on all photovoltaic cells and panel imports, increasing by 1.4 gigawatts each year for four years.

On Nov. 13, 2017, the ITC triggered the statutory 60-day decision period by delivering its report and recommendations to the president. On Nov. 27, 2017, Trump’s U.S. Trade Representatives requested additional information from the ITC, extending the final decision date to Jan. 26, 2018. Trump has few constraints in setting the tariff. He must consider the ITC’s advice, but he is not required to follow it, he must consider the national economic interest, and the tariff cannot last longer than four years.[2]

Trump has already signaled that he intends to impose a tariff. In response, solar developers have begun stockpiling solar panels, causing prices to rise and construction delays for shovel-ready projects. Now, with economic growth and environmental benefits hanging in the balance, the solar industry and American workers wait on the president’s final determination: Will Trump support solar industry growth, or will he impose a tariff, destroying thousands of jobs and our clean-energy future?

Scott Rowland ’18 is a third-year JD candidate and staff editor for the Vermont Journal of Environmental Law. Scott graduated from Middlebury College in 2012 with a degree in European studies and economics. Previously, Scott worked for a commercial solar developer with projects across New England and the Mid-Atlantic.

Mark James is an assistant professor and a senior research fellow at the Institute for Energy and the Environment (IEE). Mark holds an LLM in Energy Law (2016) from VLS where he served as an IEE Global Energy Fellow from 2014 to 2016. Mark’s current work explores privacy protections for data generated by smart meters and rooftop solar arrays.